FPSB Investment Planning Specialist QnA

When its called a best efforts commitment by under writer

When it’s called a firm commitment underwriting by Underwriter

Which is not an example of tangible investment

The third market is used by

An investor owns a stock of ITC that is currently trading at Rs.200 per share that they originally purchased for Rs.100. They are concerned that the price may decline and while they don’t want to sell their shares right now Investor wants to protect his profit not below than Rs.180.Which order he should make?

sometimes an investor may believe a stock will fall in value rather than increase what he is least likely to do?

Common stock offers two types of return

Dividend Payout Ratio is formula of =

XYZ Ltd. Declares a dividend and have record date as 18th July 2021. 17th July is Holiday of Exchange the stock is listed on. What will be EX-Dividend Date?

PQR Ltd. Declares a dividend and have record date as 22th July 2021. On what date latest by investor should by the shares for being eligible for dividends.

What will be a least likely to reason for stock split for a company?

Which is not a type of bond

Which is least likely to be true regarding bonds ?

A separate entity often created to handle the securitization process of the asset-backed securities is called.

A 1000 Rs face value Semiannual bond maturing after 6 years. what is the price of the bond if coupon is 8% and yield is 7.25%.?

What is the yield of a bond which pays annual coupon bought on 1july 2007 maturing on 1jul2017 at face value of 1000 Rs with a coupon rate of 9%? Presently trading on 972.50.

What is the present value of an annual bond with having maturity of 6 years with face value of 1000 Rs having coupon of 8.25% and having yield of 7.90%?

Calculate Modified duration of a semiannual bond bought on 4 July 2009 and maturing on 25nov2017 with coupon of 9% and yield of 7.90%.

If a Debt Mutual Fund NAV is 16 Rs. and modified duration is 7 years if there is a change in 25bps of interest rate upward what will be the new NAV.

What is the yield of a quarterly coupon paying bond giving 8% coupon trading at Rs .945 having a face value of 1000 and maturity of 8 years.

What is YTC of an annual coupon paying bond to be called back after 5 years in Rs. 1025 giving coupon of 7% having current price of 980.Face value is 1000

Mr U an investor is willing to invest in RT Ltd. But he wants to invest through such an instrument which provide him with voting rights in the company. Which of the following he should select

“—- is a written power of attorney authorizing someone to vote on behalf of and on the instructions of a shareholder.

Mr T a shareholder(common stock )in JK Ltd. Wants to maintains a 30% stake in the company always even after the new issue so which right he should use for same:

As an —- the investment bank agrees to either sell the security to the public to meet demand (returning unsold shares to the company) or buy all company shares issued to sell them itself.

“———- market creates financial asset and ——–market makes them marketable.

“——- refers to the market where equity or debt funds are raised by companies from ‘outside’ investors through an offer of securities.

“—- is where investors trade existing securities.

The market where institutional investors and broker-dealers who are not exchange members to trade large blocks of exchange-listed securities outside of exchanges is known as —

The —-price indicates the maximum price a buyer is willing to pay for a security and the —- price is the minimum price a seller is willing to receive for a security.

The difference between the bid and ask prices is referred to as the—

MR F an equity investor wants to immediately buy a stock of GH ltd. at its current price in the market. What type of order he should place?

Mr T wants to sell stock of GD ltd. And wants to sell it for at least $125 per share which type of order he should place?

—-is an order to buy or sell a security once a price is reached that becomes a market order once triggered.

MR T an equity trader is bullish on a stock but not has sufficient fund to buy the stock then his broker suggested him about an account where an investor deposits cash for a portion of the purchase and borrows the remaining amount from the institution holding the account(investing firm).What type of account is broker referring here:

—— refers to the use of debt for financing an investment to increase potential return.

Mr K an equity investor feels that stock of DG ltd is currently trading at his highest price and now it will fall thus bearish on stock but currently he has no holding of that stock than his broker suggested him he can borrows shares of company sells the shares at the current market price and hopes to purchase the shares at a lower price in the future and return back to the lender(conditions apply).What the broker is talking about?

Mr Y ask his investment advisor that if he invest in stock in what way he can earn return?

Mr L an equity investor identify stocks of good quality companies whose real worth has not been realised yet and invest in those companies what strategy he follows?

The portion of company net profit distributed among the shareholder is known as —

The company will retain some of the net income to support continued growth of company it is referred as—–

KPL Ltd. Has EPS of $16 and distribute only $4 among shareholder what is the dividend pay-out ratio?

—- when the corporation closes its books and identifies shareholders of record those who own shares of the stock and will receive the dividend.

When the company buy back outstanding shares of company stock. This is called a—

—- reduces the price of each share of stock thereby making it easier and more appealing for investors to buy shares. It increases the number of shares outstanding; it does not change the total value nor does it impact the ownership interest of current shareholders.

Mr Y is a shareholder in JHG Ltd. And company announced the stock split of 2 for 1 Mr Y wants to know the impact on his holding value of stock?

Calculate the value of stock if current dividend paid by company is $5 and is expected to grow by 4% p.a. and expected return is 10% pa.

Calculate the return from stock if it is expected to pay dividend of $2 and its current price is $45 and is expected to grow by 10%.

P/E ratio of HLX Ltd. A pharmaceutical company is 12.47 whereas the pharmaceutical industry P/E is 15.45 whether the stock is

—-markets deal with short term lending and borrowing of funds.

A ——-is a legal document that specifies the terms of bond issue. The terms include the bond’s coupon rate maturity date and other conditions that may be relevant.

Mr A an investor wants to invest in bonds of GHJ Ltd. But is worried about what if the company make default in interest and principal payment which measure the company should look upon and compare before investing:

A —— bond provides the bond issuer with the right to buy back the bonds prior to maturity at a pre-specified price whereas a —— bond provides the bondholders with the right to sell their bonds to the issuer prior to maturity at a pre-specified price.

Mr Y is willing to invest in ZCB of GH Ltd. but he wants to know how he will receive the interest

Mr T is worried about inflation and is a conservative investor thus in which of the following instrument he should invest to meet his profile:

Mr P an investor asks his advisor about the risk associated with bond investment:

—- are contracts similar to insurance between the swap buyer and seller. The buyer (normally the bondholder) makes regular “insurance” payments to the seller who agrees to pay the contract’s par amount in case of issuer default.

Mr G is a bondholder and government announce an increase in interest rate by 200 basis points what will be the impact on existing bond price.

Calculate the yield to maturity for the bondholder with face value $1000 and 8% p.a. coupon payable semi-annually with 10 years to maturity and current price $925.

Calculate the yield to maturity for the bondholder with face value $1000 and 8% p.a. coupon payable semi-annually with 10 years to maturity and current price $925.

Mr Y calculated his yield on a bond with $20 coupon payable annually divided by current bond price. Which yield it represent

—-measures the impact of interest rate changes over time.

In a decreasing interest rate environment the ——duration bond would have greater gains.

With increasing interest rates the advisor would —– duration.

—-helps us understand the shape or curvature of the price and yield relationship.

A—- bond portfolio holds almost all its bonds in intermediate maturities rather than spreading the maturities out.

A—bond portfolio purchase short-term and long-term bonds (but no mid-term bonds). The idea is to lock in higher interest rates with longer-term bonds while the short-maturity bonds provide flexibility and liquidity.

Mr F wants to know the value of her preferred stock. It has an annual dividend of $8 per share and her required rate of return is 7.5%. Using the zero-growth model what is the current value of her stock?

A ——- is an investment company that manages a portfolio of real estate holdings for shareholders

A—– provides funding for building projects and may also invest in other mortgages. Interest received is passed to shareholders.

What is the annual return (capitalization rate) of a property purchased for $7.5 million with net operating income (NOI) of $700000 and gross income of $960000?

—- is a financial contract which derives its value from an underlying asset reference rate or index.

DERIVATIVES ARE TYPICALLY USED FOR

TYPES OF OPTION ARE

BUY A PUT PROFIT IS — AND LOSS IS —-

SELL A CALL PROFIT IS — AND LOSS IS —-

SELL A PUT PROFIT IS — AND LOSS IS —-

PAY OFF CALL —- AND PUT —-

INTRINSIC VALUE OF CALL—– AND PUT —–

IN THE MONEY MEANS—

OUT OF MONEY MEANS—

AT THE MONEY OF OPTION IS

TIME VALUE OF AN OPTION IS

—- refers to the change in underlying stock price.

— refers to change in volatility.

As the underlying stock price increases call price —-

As the strike price for a specific class of option decreases put price—

—exchange a fixed-interest income stream from one party for one that is based on a floating rate from another party.

—- are standardised and —- are customized.

A jewellery maker that wants to protect against increases in the price of gold it needs to purchase from a might enter into what type of a contract?

—-make investments in start-up business and —- make investment in well-established public company which are not operating at their full efficiency and need structural upgradation to perform well and then sell the company.

—- are a form of pooled investment structure can establish long and short positions within their holdings as well as employing the use of options margin or other derivative securities but are subject to much less regulation and oversight and can employ many different strategies.

—- is a decentralized multi-layered market functioning as a facilitator in currency transactions.

These products generally do not offer a full return of principal at maturity, will generally have caps (maximum returns) on return potential, and will typically be subject to some degree of downside exposure linked to the underlying reference asset